Merck, Glaxo Reduce HPV Vaccine Prices in Poorest Regions

Merck said one factor in determining the price is the cost involved in vaccine production and maintaining the manufacturing facilities, and that higher volumes could lower the price. The drugmaker has committed to sell 2.4 million doses of its Gardasil vaccine to GAVI from 2013 to 2017. That would generate about $11 million in revenue. Photographer: JB Reed/Bloomberg

May 9 (Bloomberg) -- Merck & Co. and GlaxoSmithKline Plc
will cut the prices of their cervical cancer vaccines for some
countries in the first large-scale effort to get the shots to
millions of girls in the world’s poorest regions.

The companies will sell their vaccines to eligible low-income countries for about $4.50 a dose, a more than 95 percent
discount from the prices charged in the U.S., said Nina
Schwalbe, managing director for policy and performance at the
GAVI Alliance, which will purchase the vaccines and distribute
them to the countries at a further reduced price.

Until now, there have been very few efforts to get the
inoculations that protect against the sexually transmitted human
papillomavirus, or HPV, to women in low-income countries where
there is little testing or treatment for cervical cancer. More
than 80 percent of deaths from cervical cancer are in developing
countries, where it is the leading cause of cancer deaths in
women.

“In developing countries, there is no access to screening
and no access to treatment so cervical cancer is a death
sentence,” Schwalbe said in a telephone interview. “This is a
major global health issue.”

The first vaccination program will start in Kenya this
month and will be followed by seven other countries, including
Niger, Ghana and Tanzania. GAVI plans to have HPV vaccination
programs in 40 countries within seven years, Schwalbe said. GAVI
will subsidize the cost to the countries, charging the poorest
just 20 cents a dose, and covering the difference with donations
from developed countries and nonprofit groups such as the Bill &
Melinda Gates Foundation, she said.

Test Program

Merck, the second-biggest U.S. drugmaker, has spent several
years testing programs in Rwanda and Bhutan to assess whether
low-income countries could effectively administer the vaccine.
In Rwanda, 95 percent of adolescent girls have received the
standard three doses of the vaccine. That compares to about a
third in the U.S. where the vaccination has met resistance over
its more than $300 price, safety concerns, and questions about
vaccinating young women for a sexually transmitted virus.

While the price discount is more than 95 percent, the $4.50
cost per dose is still too high for developing countries, said
Kate Elder, vaccine policy adviser for Doctors Without Borders,
the nonprofit group that provides medical aid in more than 60
nations.

“The price is unjustifiably high and will add to the
already spiraling vaccination costs faced by low-income
countries,” Elder said in a statement. “While the deal is a
reduction from the price paid by developed countries, it will
still cost nearly $14 to fully protect a girl against HPV -- a
price that is too high for the world’s poorest countries.”

Determining Price

Merck said one factor in determining the price is the cost
involved in vaccine production and maintaining the manufacturing
facilities, and that higher volumes could lower the price. The
Whitehouse Station, New Jersey-based drugmaker has committed to
sell 2.4 million doses of its Gardasil vaccine to GAVI from 2013
to 2017. That would generate about $11 million in revenue. The
vaccine had global sales of $1.63 billion in sales last year.

Cervarix, the HPV vaccine from London-based Glaxo,
generated about $428 million in 2012 sales, according to data
compiled by Bloomberg.

“You can’t really talk about the price of a vaccine in a
vacuum,” said Mark Feinberg, Merck’s vice president and chief
public health science officer. He said Doctors Without Borders
isn’t accounting for “how expensive an enterprise it is to
develop and manufacture vaccines and make them available in a
substantial way in high quantities in a heavily regulated
environment.”